Presentation Transcript

1. The Goals of Finance To simplify finance systems and business processes To adopt a GAAP (Generally Accepted Accounting Principles) compliant "single source of truth" in all financial reporting To build and develop a strong team of high quality professional staff in finance roles across the University To develop a responsive, helpful, customer-friendly culture To improve the quality of financial management and planning, positioning Finance as the trusted adviser of decision-makers at all University levels
2. Stephen Rees Director of Finance
3. The Way Forward Janz Reinecke ~ Finance Division
4. Agenda The need and support for transformation How the transformation is going to happen What’s in it for you? Our systems What are the changes? Next steps Questions?
5. The need for transformation NOW AHEAD Decision Support: Distrust of Financial Information Informal framework Decision Support: Customer service focus High degree of Financial Management Improved decision making Stewardship & Compliance: Confusing rules and inconsistent accounting treatments Little accountability and ownership Stewardship & Compliance: Appointment of Finance Managers Consistent reporting More reliably phased budgets Transaction Processes: Journal rework Offshore purchases are complex and slow Low degree of automation Transaction Processes: Reduced number of transfer journals Procedures performed at an appropriate level
6. The support for improvement Analysis of project balances shows that approx. 40% of Projects are in deficit (by value compared to budgets) Non-standardised, conflicting  reports used for review of Faculty, School and Divisional financial performance Variable ownership and accountability of Faculty and Divisional budgets across the University Inconsistent accounting treatment (non-GAAP) operating across different levels of the University High levels of resource dedicated to journal re-work, reporting dispute and correction related activities
7. How? Alignment of NS Financials with Calumo Consistent accounting rules across all areas Development of Customer Service standards Finance Managers supporting areas of the University Substituting Commitment Control with active financial management Budget model established on common platform to AIFRS Review of business processes which impact customers Finance assisting with implementation of improvements Standard monthly reporting framework to discuss operating results to budget Regular review and discussion on financial performance & forecast position Ongoing monitoring of service quality through customer feedback Clear advice and quality services to support the UNSW community
8. What’s in it for you? Financial information which is meaningful, clear and friendly A focus on advice and guidance tailored to the needs of your business The removal of non-value add activities (such as removing 100,000 plus budget transfer journal entries across faculties, elimination of over 2,000 redundant research reports) Reliable management reports aligned to the needs of the business Provision of strong finance capabilities embedded into the organisation to support local decision making A more customer-centric service culture across every area of Finance /
9. Our Systems Student Administration FIMS (Calumo) NS Financials General Ledger updates overnight HRMS / Payroll Management Reporting n/Vision New South Solutions (NSS)
10. NS Financials Expenses Asset Management eProcurement Credit Card Accounts Payable Purchasing Billing Accounts Receivable General Ledger
11. How does this impact you? / Commitment Control Fund Code Reduction Chart of Accounts Review Reporting AIFRS Budget Management
12. Commitment Control
13. Commitment Control What is Commitment Control? Commitment Control is used for budgetary control. It refers to the process of defining and tracking the actual expenses incurred through each module. Commitment control blocks a transaction that would cause a pre-set budget limit to be exceeded.
14. Myths about Commitment Control BELIEFS EVIDENCE TO THE CONTRARY Prevents over spending At 31 Aug 09, in value terms approx 40% of projects over budget Keeps budget owners below budget Over 40% of projects are in deficit Allows more time to spend on Research type activities and less time managing the finances Considerable time is spent on adjusting misdirected transactions to resolve commitment control issues Without Commitment Control there would be a “spending frenzy” Commitment Control wasn’t applying to people related costs (which accounts for 80% of total costs) Necessary part of UNSW Areas of UNSW have operated without commitment control for some time Financial performance would go down hill if not for Commitment Control Commitment Control ‘budgets’ total $29.7 million above Official UNSW Budget A very useful tool to assist management in managing budgets Commitment Control flags an issue too late
15. Commitment Control signals issues too late
16. Active budgetary control works better
17. No Commitment Control Budget checks will no longer fail Processing transactions will be easier (and more accurate) Less adjustments will be necessary Misdirection of expenditure will be reduced Budget management can now actively be performed by the budget owner /
18. Fund Code Reduction
19. The Challenges Size & Complexity Combination of organisational structure, project structure (to add a detailed fund structure - 5 funds grew into about 40 over time) Informal rules developed around the use of one fund vs another Transfers between fund categories diminished their intended purpose Historically balances and different treatments resulted making comparing them difficult
20. Fund Code Outcomes Consolidated Operating Commercial Activities Strategic Capital Restricted Reduced from 33 codes to just one: OP001 12 codes of 35 remain for 2010 SIR and SPF codes remain LT001 will stay until 2011 CPF01 remains USG01 codes retired 380 codes reduced to 180 codes Maintained for HERDC purposes Ongoing review to identify further reductions Remaining 23 codes transferred to OP001 and retired /
21. Chart of Accounts Review Update
22. Chart of Accounts Large volume of accounts, many with similar/indistinguishable descriptions making their use unclear or confusing No clarity on the use of specific accounts such as contractors, contract services and little clarity on accounting rules for internal transfers, cost recoveries, etc What is the process for getting new account opened? Who do I contact? / Who do I ask for assistance? Who are communications sent to? Cleanup of old projects, departments and funds long overdue Account Names & Descriptions Accounting Guidelines Process Clarity & Communication Structural Issues
23. Chart of Accounts “Chartfield” Business Unit Revenue Accounts Expenses Departments B/Sheet Funds Projects Program PHASE ONE (in Finalisation stage) Class
24. Chart of Accounts “Chartfield” Business Unit Revenue Accounts Expenses Departments B/Sheet Funds Projects Program PHASE TWO (revenue accounts) Class
25. What are the Revenue account changes? Accounts Not Used 71 Accounts Accounts not used for 2-4 years will be made inactive Account Name & detailed description will be amended toimprove clarity & consistency of revenue allocation Account Name Changes 95 Accounts These accounts will be inactivated Historical data to these accounts will not change No transfers necessary Redundant Accounts and redirects 50 Accounts New Accounts 15 Accounts New accounts to enhance clarity and consistency
26. Major changes Naming convention has been developed Redirects / Redundant accounts Changes to existing coding practice Reference guides have been created for Revenue Accounts (to compliment the existing guide for Expenses)
27. Naming convention
28. Redirect Example – Teaching Income 2009 0903 Fees Non Award Student Activity 2010 0909 Fees Non Award Local Misc. 0911 Teaching – Cont Ed’n Subjects 0910 Fees Non Award Math Skills 0913 Teaching – Cont Ed’n Courses 0911 Fees Voluntary Subjects 0913 Fees Continuing Education
29. What do you need to do? Identify accounts that are applicable to you and ensure the transactions that are allocated to these accounts are applicable under the revised user guidelines, if not establish what the appropriate account is Identify if any of the accounts you use are listed to be redirected and ensure any concerns are addressed Review information on the www.fin.unsw.edu.au Remember that the Chart of Accounts Review is a work in progress and we welcome user feedback
30. CoA Website / www.fin.unsw.edu.au
31. Reporting
32. Reporting – The Challenges Reports disconnected between total Faculty / Division balances and project related balances Unclear from reports what was excluded and how reconciles to other reports Context biased towards funds & project balances rather than organisation structure (department) Project level budget values not at a level which can be used to manage specific expense categories Abundance of project codes largely due to Commitment Control Needed informative reports on what we spend our revenue on
33. Reporting - 2009 NSF Calumo No Executive Reporting Executive Reporting Faculty / Division reportsNo student revenue allocated No budget detail by account type Faculty / Division reportsStudent revenue allocated Budget at summary account level Project level detail One line budget No project reports
34. Reporting - 2010 NSF Calumo Executive Reporting Executive Reporting Faculty / Division reports Student revenue allocated AIFRS basis Comparisons against budget Faculty / Division reportsAligned with NS Financials Project level detail Comparison to budget at account level Ownership at Faculty / Division levels No project reports
35. New nVision Reports Actuals and Accrue_Add Aligned with Calumo
36. New nVision Reports Reports available from early 2010
37. AIFRS
38. AIFRS Australian International Financial Reporting Standards www.aasb.com.au (Australian Accounting Standards Board) www.iasb.org (International Accounting Standards Board)
39. Accounting Manual New/Updated Policies: Financial Reporting Foreign Currency Translation Taxes Inventories Intangible Assets Property, Plant & Equipment Impairment of Assets Non-current Assets held for Sale and Discontinued Operations Investments in Associates and Joint-Ventures Investments and Other Financial Assets Leases Payables and Borrowings Trade Receivables Provisions and Employee Benefits Revenue Recognition /
40. AIFRS Student Fees Government Grants Revenue Research Employee Costs Other
41. Revenue – Teaching & Learning 2009 2010 Student Fees Revenue recognised on CASH basis & End of year accrual Revenue recognised based on ACTUAL student enrolments (accrued as earned) Government Grants Revenue DEEWR revenue allocated to Faculties in Calumo not in NS Financials DEEWR revenue allocated to Faculties in NS Financials, then reported in Calumo Research Employee Costs Other www.fin.unsw.edu.au
42. Student related income in NS Financials Same balances in NS Financials & Calumo Student Fees 2009 2010 UNSW 600m Sum of below (600m) Government Grants Split down to School level Revenue MED Nil 150 Research SCI Nil 220 Derived from Student Financial System Employee Costs ARTS Nil 230 Other etc… … … www.fin.unsw.edu.au
43. Research 2009 2010 Student Fees Coding to limited set of specific accounts at Faculty level Coding to relevant income accounts Government Grants Revenue Re classification of grants based on the nature at Central No reclassification required Research Monthly deferral/accrual at Central level Monthly deferral/accrual at Faculty level Employee Costs Other www.fin.unsw.edu.au
44. Expenses – Employee costs 2009 2010 Student Fees Annual leave: No charge when taken; Charged to Faculties when entitlement accrues Annual leave: Charged to Faculties when taken; Charged to Central when entitlement accrues Government Grants Standard charge for Annual Leave based on statutory rate of 20 days per year per employee Salary / wages that would otherwise be charged to S&W account, charged to AL expense Revenue More constant Annual Leave expense from period to period Highly variable Annual Leave expense from period to period Research On-costs reflected in Faculty / Division results Related on-costs not reflected in Faculty / Division results Employee Costs More transparency for Faculties and Divisions Low level of transparency Other www.fin.unsw.edu.au
45. Other Area 2010 Student Fees Computers, Motor vehicles , Other Plant & Equipment All asset acquisitions through POs to enable capture of 'accruals' & 'commitments' info Tagging & Stocktake performed for assets costing $5,000 or more Government Grants Revenue Capital/ Construction projects More formalised and collaborative 'capital assessment‘ process in order to capture additional costs of a capital nature Research IT expenditure capitalisation Employee Costs Other Contingent Assets & Liabilities Better guidance embodied in the procedure www.fin.unsw.edu.au
46. Other Area 2010 Student Fees • Purchase Orders to be raised prior to purchase • Material contracts should to be entered into as a collaboration between Facilities Management, Procurement, Legal and Research office (for research contracts) Commitment 2009 2010 Government Grants Revenue Research Leasing Arrangements Encouraged use of Lease Register functionality within NS Financials. Employee Costs Other www.fin.unsw.edu.au
47. Moving towards AIFRS 2009 2010 REVENUE Student Fees At Faculty/School/Division level Not at Faculty level Government Grants At Faculty/School/Division level Not at Faculty level Research At Faculty/School/Division level Not at Faculty level Investment Income Not at Faculty level Not at Faculty level EXPENSE Expenses Not at Faculty level At Faculty/School/Division level Finance Costs Not at Faculty level Not at Faculty level Employee Costs At Faculty/School/Division level Not at Faculty level Impairment Not at Faculty level Not at Faculty level /
48. Budget Management
49. Impact on Budgeting Commitment Control Minimal impact on UNSW’s formal budget setting process Fund Codes Budgeting Minimal impact; budgets prepared at summary fund levels Reporting Fund codes that have been reclassified as operating will be re-mapped Reporting Monthly management reports and nVision reports will contain consistent data; reconciliation no longer required
50. The Way Forward STANDARD MANAGEMENT REPORTING Supplementary Projects Ledger CALUMO NSF Budget UNSW Faculty / Division OFFICIAL UNSW BUDGET OFFICIAL UNSW BUDGET Schools Projects OPTIONAL (part of budget process) /
51. Ongoing Support Network Facilities - Michelle Hardy University Services - Tania Maiolo CoFA - Betty Romero (acting) FASS - Urania Stamios Donate UNSW - Kevin Lee Engineering - Robert Young Science - Darren Parkinson Medicine - Tony Gardner ADFA - Mark Van Poppel ASB - Robert Owens * FBE – TBA (contact Kelvin Hui) * Law – TBA (contact Rajinder Cullinan)
52. Next Steps / 1st of a series of informational briefings Reports are under development for release in early 2010 Frequently Asked Questions to follow on website Future sessions are envisaged targetted at the specific needs of individual faculties / divisions Accounting Manual (including procedures) Get to know your Finance Managers Evaluation form
53. Any Questions? Please start your questions with: Your name Your Faculty / Division Your role Grant CooleyDEPUTY DIRECTOR OF FINANCIAL CONTROL
54. Handouts / AIFRS details summary 2010 nVision Report Wuick Reference Guide CoA Quick Reference Guide – Expense Accounts CoA Quick Reference Guide – Revenue Accounts CoA Revenue Accounts Summary of changes CoA Revenue Accounts Detailed list of changes Expense Accout Detailed list of changes Customer Service Charter Web Page Who Can Help